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Donaldson's (DCI) Board Okays 4.8% Hike in Dividend Rate

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Donaldson Company, Inc. (DCI - Free Report) yesterday announced rewards for its shareholders in the form of a hike in the quarterly dividend rate. Notably, the company’s shares gained 0.64% yesterday, ending the trading session at $60.93.

We believe that such shareholder-friendly policies of the company reflect a strong cash position and growth potential. Exiting the second quarter of fiscal 2021 (ended January 31, 2021), the company’s cash and cash equivalents were $207.3 million, whereas its cash flow from operating activities in the quarter totaled $73.4 million and free cash flow was $61.8 million.

Inside the Headlines

As noted, the company’s board of directors approved a 4.8% hike in the quarterly dividend rate. The rate now stands at 22 cents per share, higher than the previous quarterly dividend rate of 21 cents. On an annual basis, the dividend rate now stands at 88 cents per share, up from the previous rate of 84 cents.

Donaldson will pay the revised quarterly dividend on Jun 25, 2021, to shareholders of record as of Jun 10.

Sound Shareholder-Friendly Policies

The company is committed to rewarding shareholders handsomely through dividend payments and share buybacks.

Its cash dividend payout per share increased from 73 cents in fiscal 2018 to 84 cents in fiscal 2020. Also, the company’s payouts were 42 cents per share or $53.1 million in the first half of fiscal 2021 (ended January 2021).

Share repurchases by the company totaled $345.5 million in the last three fiscal years. Also, it bought back shares worth $46.3 million in the first half of the current fiscal year. Exiting the second quarter of fiscal 2021, the company was left to repurchase 9.8 million shares.

We believe that impressive financial performance in the quarters ahead will enable the company to continue rewarding shareholders handsomely through dividend hikes and share-buyback activities.

Zacks Rank, Price Performance & Estimates Estimate Trend

With a market capitalization of $4.6 billion, Donaldson currently carries a Zacks Rank #4 (Sell). The company is wary of the headwinds related to the pandemic. The persistence of demand-related problems in Special Applications and Industrial Filtration Solutions businesses might hurt.

In the past three months, the company’s shares have gained 1.3% against a 5.2% decline recorded by the industry.




 

Then again, Donaldson’s earnings estimates at $2.22 for fiscal 2021 (ending July 2021) and $2.58 for fiscal 2022 (ending July 2022) reflect no change and a decrease of 0.4% from the respective 60-day-ago figures.

Donaldson Company, Inc. Price and Consensus

 

Donaldson Company, Inc. Price and Consensus

Donaldson Company, Inc. price-consensus-chart | Donaldson Company, Inc. Quote

Stocks to Consider

Some better-ranked stocks in the industry are HeritageCrystal Clean, Inc. , Energy Recovery, Inc. (ERII - Free Report) and Sharps Compliance Corp. . While HeritageCrystal sports a Zacks Rank #1 (Strong Buy), both Energy Recovery and Sharps Compliance carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Current-year earnings estimates have improved for these companies in the past 60 days. Further, the positive earnings surprise in the last reported quarter was 85.71% for HeritageCrystal, 50.00% for Energy Recovery and 150% for Sharps Compliance.

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